THE BANKING SECRET

The banking secret is an open secret.  If we learned about money, money creation, banking, credit etc. in school it would not be possible to keep the banking secret.  The banking secret is the difference between how we think banking works and how it actually works. We think that banks lend us money that they have, just like an insurance company lends money they have, or the way we do when we lend someone money.  What we don't realize, because it is kept secret, or obscured, even from low level bankers, is that the bank creates the money it lends, as an accounting entry, and this is almost the only way that money comes into circulation (coins are minted by the treasury debt and interest free).  From a certain point of view this is a reasonable way to issue money. But if we understood it, and all the consequences that it has, we would rebel, as the colonies did. What the banking secret hides is that the banks benefit from their special position as the issuer of our money, they get the interest and they control, almost completely, what is credit worthy, what you can get money for.  Only those things are credit worthy that will easily generate ample profit to repay the interest and principal. The consequences of this are huge, it accounts for our entire economic system requiring continuous growth, turning nature into consumer products and into garbage in an ever expanding cycle. It is why as much cost is externalized as possible (e.g. environmental costs, social costs, as in cheap labor, etc)  It is the reason for endless wars which impose our system on any country which tries to protect themselves from it. It is responsible for the increasing transfer of wealth from the people to the owners of the banks. It is why we have too big to fail banks, criminal enterprises that can't be brought to justice, banks that privatize their profits and socialize their losses. All of this is a direct consequence of the banks issuing our money as a debt to themselves.  And all of it is based on the success of the bankers in keeping the banking secret. Since the banking system, run by the Federal Reserve System, completely controls money creation, we are effectively, if secretly, governed by the banking system. By the way, the Federal Reserve is privately owned, the appearance of it being a Government Agency is only an appearance. And, if you think through what happened with the 2008 bailout it will be obvious who runs the government behind the veil of obfuscation about the Fed.

 

If that seems fantastic to you consider how banks create money:  Banks issue money as "loans" based on the promissory note. The promissory note is a promise by the "borrower" to the bank to pay the bank the amount issued plus interest.  The bank receives the promissory note and treats it as an asset, something valuable that you have given to the bank, and it issues the money as an accounting entry into "your" account, as its liability, its promise to pay you money.  All the money in the economy is issued this way. We, the people, promise to pay to the bank the amount the bank issues plus interest. The bank does not lend money they acquired in some legitimate way, they create the money and "lend" it to the "borrower", but what really happens is that you promise to pay and the bank promises to pay.  Also, they only issue what they call the "principal" amount, they do not issue what they call the "interest". As a consequence there is never enough money issued to pay both principal and interest. All the money to pay the interest has to come from new principal. Since the money was created by an accounting entry, the promissory note amount (bank asset) and the bank's promise to pay "money" (bank liability), it follows that, as the amount of the promissory note goes down as the money issued by the bank is returned to the bank as "principal" payments, so the amount of "money" or bank credit, goes down.  If everyone paid off all their bank loans there would be no money. This may seem fantastical, but it is nevertheless true. What it means, of course, is that there has to be a "principal" amount or "debt" that is never paid down, and it has to be big enough that it serves as the permanent money supply. When you figure out what that is the penny will have dropped. Hint: It has a debt ceiling which periodically needs to be raised and a lot of fuss is made about raising it, but it should be obvious that the bankers aren't worried about whether it will be raised! They do, however, worry about the trillion dollar coin idea because they know that the Treasury could coin money (trillion dollar coins) and pay off the debt.

 

To describe this more accurately, the banking system deceives the people into believing that banking is a business that deserves the interest because of the risk, cost of doing business, etc., which could be justified if they were lending money rather than issuing it.  It would be more accurate to say that the banking system appropriated to itself the primary sovereign power, the power to provide the people with a measure of value and a medium of exchange, money. It is necessary for this to be done clandestinely because somewhere we all know that issuing money must be a function of government and most people, when asked  where money comes from, say it comes from the government or the Fed, believing that the Fed is a government agency.

 

Because of the deceptive banking system, we promise to make the money the bank issues (creates) valuable and pay that value to the bank that created it, and in the case of a 30 year note, pay more than twice as much as "borrowed".  The banking system assesses our ability to make good on our promise to pay, and then creates the money that we need, and we have to pay back the value we created, to the bank which deceived us. Now, if you have followed this, ask yourself how it should be?  My answer is simple, the Government should issue (create) the money needed to accomplish public purposes, such as infrastructure, (parks, roads, mail, internet, etc.) and all the services such as fire and police, courts, etc. This way the money is representing the value created by the people who do the work.  And the government could issue money to represent the increase in productivity (new value created by all of us in the economy) and send everyone who contributed to the economy a dividend check. Money put into circulation in this way would completely eliminate the need for taxes, there would be no debt, etc.

 

For a detailed and entertaining video about how banking works please see:  Money as Debt II, Promises Unleashed, by Paul Grignon.

 

"Why do you stay in prison

When the door is so wide open?”

Rumi

 

I am just so impressed with the feat of the ruling bankers who have created and maintained a public consensus that has us pay for our own slavery.  Of course if you don't know that you are enslaved you won't rebel. The most effective prison is the one created in your mind. It is so amazing to me that the money power could create a whole culture and economy that serves them and, even though we know something is not right, the public mind is so controlled that we can't put our finger on it and recognize the source of our misery.

During the bailout of 2008 and 2009 I thought people would "get it" that they would see through the lies and recognize the control the bankers exercise over society.  But, oh no, not a glimmer. Even when I point out that the problem is explained by the major media as criminal activity on the part of the too big to fail banks, but no banker goes to jail, they still don't get it.

 

 I really do hope that you get it and are willing to do something about it.

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